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Vmware Inc (VMW) Stock Fundamental Analysis

NYSE:VMW - New York Stock Exchange, Inc. - US9285634021 - Common Stock - Currency: USD

142.48  -7.43 (-4.96%)

Premarket: 143 +0.52 (+0.36%)

Fundamental Rating

5

Overall VMW gets a fundamental rating of 5 out of 10. We evaluated VMW against 283 industry peers in the Software industry. While VMW belongs to the best of the industry regarding profitability, there are concerns on its financial health. VMW is not valued too expensively and it also shows a decent growth rate.


Dividend Valuation Growth Profitability Health

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8

1. Profitability

1.1 Basic Checks

VMW had positive earnings in the past year.
VMW had a positive operating cash flow in the past year.
In the past 5 years VMW has always been profitable.
In the past 5 years VMW always reported a positive cash flow from operatings.
VMW Yearly Net Income VS EBIT VS OCF VS FCFVMW Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2B 4B 6B

1.2 Ratios

VMW has a better Return On Assets (4.43%) than 82.92% of its industry peers.
VMW has a Return On Equity of 55.99%. This is amongst the best in the industry. VMW outperforms 97.86% of its industry peers.
The Return On Invested Capital of VMW (7.86%) is better than 85.05% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for VMW is below the industry average of 12.21%.
Industry RankSector Rank
ROA 4.43%
ROE 55.99%
ROIC 7.86%
ROA(3y)5.88%
ROA(5y)10.66%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)9.4%
ROIC(5y)10.41%
VMW Yearly ROA, ROE, ROICVMW Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 100 -100 200 -200

1.3 Margins

VMW's Profit Margin of 10.48% is amongst the best of the industry. VMW outperforms 84.70% of its industry peers.
In the last couple of years the Profit Margin of VMW has grown nicely.
Looking at the Operating Margin, with a value of 14.00%, VMW belongs to the top of the industry, outperforming 84.70% of the companies in the same industry.
VMW's Operating Margin has declined in the last couple of years.
VMW's Gross Margin of 81.19% is amongst the best of the industry. VMW outperforms 86.83% of its industry peers.
VMW's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 14%
PM (TTM) 10.48%
GM 81.19%
OM growth 3Y2.65%
OM growth 5Y-7.92%
PM growth 3Y-45.05%
PM growth 5Y3.26%
GM growth 3Y-0.79%
GM growth 5Y-0.97%
VMW Yearly Profit, Operating, Gross MarginsVMW Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 40 60 80

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3

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so VMW is destroying value.
Compared to 1 year ago, VMW has more shares outstanding
The number of shares outstanding for VMW has been increased compared to 5 years ago.
Compared to 1 year ago, VMW has an improved debt to assets ratio.
VMW Yearly Shares OutstandingVMW Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M 400M
VMW Yearly Total Debt VS Total AssetsVMW Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 10B 20B 30B

2.2 Solvency

An Altman-Z score of 1.85 indicates that VMW is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 1.85, VMW perfoms like the industry average, outperforming 48.40% of the companies in the same industry.
The Debt to FCF ratio of VMW is 2.25, which is a good value as it means it would take VMW, 2.25 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of VMW (2.25) is better than 73.67% of its industry peers.
A Debt/Equity ratio of 3.73 is on the high side and indicates that VMW has dependencies on debt financing.
VMW has a Debt to Equity ratio of 3.73. This is amonst the worse of the industry: VMW underperforms 87.19% of its industry peers.
Although VMW does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
Industry RankSector Rank
Debt/Equity 3.73
Debt/FCF 2.25
Altman-Z 1.85
ROIC/WACC0.77
WACC10.18%
VMW Yearly LT Debt VS Equity VS FCFVMW Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2B 4B 6B 8B 10B

2.3 Liquidity

A Current Ratio of 0.87 indicates that VMW may have some problems paying its short term obligations.
VMW has a Current ratio of 0.87. This is amonst the worse of the industry: VMW underperforms 82.56% of its industry peers.
A Quick Ratio of 0.87 indicates that VMW may have some problems paying its short term obligations.
With a Quick ratio value of 0.87, VMW is not doing good in the industry: 81.49% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 0.87
Quick Ratio 0.87
VMW Yearly Current Assets VS Current LiabilitesVMW Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B 8B 10B

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5

3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 3.90% over the past year.
The Earnings Per Share has been growing slightly by 4.63% on average over the past years.
The Revenue has been growing slightly by 3.56% in the past year.
The Revenue has been growing by 11.17% on average over the past years. This is quite good.
EPS 1Y (TTM)3.9%
EPS 3Y0.31%
EPS 5Y4.63%
EPS Q2Q%11.59%
Revenue 1Y (TTM)3.56%
Revenue growth 3Y7.28%
Revenue growth 5Y11.17%
Sales Q2Q%2.16%

3.2 Future

Based on estimates for the next years, VMW will show a small growth in Earnings Per Share. The EPS will grow by 7.04% on average per year.
Based on estimates for the next years, VMW will show a quite strong growth in Revenue. The Revenue will grow by 8.40% on average per year.
EPS Next Y9.9%
EPS Next 2Y12.07%
EPS Next 3Y8.72%
EPS Next 5Y7.04%
Revenue Next Year4.52%
Revenue Next 2Y5.39%
Revenue Next 3Y5.55%
Revenue Next 5Y8.4%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
VMW Yearly Revenue VS EstimatesVMW Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5B 10B 15B 20B 25B
VMW Yearly EPS VS EstimatesVMW Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5 10 15

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6

4. Valuation

4.1 Price/Earnings Ratio

VMW is valuated rather expensively with a Price/Earnings ratio of 20.59.
85.77% of the companies in the same industry are more expensive than VMW, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.60, VMW is valued a bit cheaper.
A Price/Forward Earnings ratio of 17.40 indicates a rather expensive valuation of VMW.
Based on the Price/Forward Earnings ratio, VMW is valued cheaply inside the industry as 85.41% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of VMW to the average of the S&P500 Index (22.43), we can say VMW is valued slightly cheaper.
Industry RankSector Rank
PE 20.59
Fwd PE 17.4
VMW Price Earnings VS Forward Price EarningsVMW Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, VMW is valued cheaply inside the industry as 85.41% of the companies are valued more expensively.
92.53% of the companies in the same industry are more expensive than VMW, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 13.2
EV/EBITDA 20.29
VMW Per share dataVMW EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 -10 20 30

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates VMW does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of VMW may justify a higher PE ratio.
PEG (NY)2.08
PEG (5Y)4.45
EPS Next 2Y12.07%
EPS Next 3Y8.72%

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0

5. Dividend

5.1 Amount

VMW does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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Vmware Inc

NYSE:VMW (11/21/2023, 8:04:00 PM)

Premarket: 143 +0.52 (+0.36%)

142.48

-7.43 (-4.96%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)11-30 2023-11-30/amc
Earnings (Next)02-29 2024-02-29/amc
Inst Owners0.21%
Inst Owner Change0%
Ins Owners0.31%
Ins Owner Change0%
Market Cap61.52B
Analysts53.33
Price Target169.22 (18.77%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.18%
Min EPS beat(2)-5.43%
Max EPS beat(2)5.79%
EPS beat(4)2
Avg EPS beat(4)0.57%
Min EPS beat(4)-7.68%
Max EPS beat(4)9.61%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-2.31%
Min Revenue beat(2)-2.35%
Max Revenue beat(2)-2.27%
Revenue beat(4)1
Avg Revenue beat(4)-2.07%
Min Revenue beat(4)-5%
Max Revenue beat(4)1.34%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)9.94%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.95%
EPS NY rev (1m)0%
EPS NY rev (3m)2.55%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.35%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.66%
Valuation
Industry RankSector Rank
PE 20.59
Fwd PE 17.4
P/S 4.52
P/FCF 13.2
P/OCF 12.08
P/B 24.15
P/tB N/A
EV/EBITDA 20.29
EPS(TTM)6.92
EY4.86%
EPS(NY)8.19
Fwd EY5.75%
FCF(TTM)10.8
FCFY7.58%
OCF(TTM)11.79
OCFY8.28%
SpS31.52
BVpS5.9
TBVpS-17.18
PEG (NY)2.08
PEG (5Y)4.45
Profitability
Industry RankSector Rank
ROA 4.43%
ROE 55.99%
ROCE 9.79%
ROIC 7.86%
ROICexc 12.08%
ROICexgc 56.72%
OM 14%
PM (TTM) 10.48%
GM 81.19%
FCFM 34.25%
ROA(3y)5.88%
ROA(5y)10.66%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)9.4%
ROIC(5y)10.41%
ROICexc(3y)12.19%
ROICexc(5y)13.94%
ROICexgc(3y)39.61%
ROICexgc(5y)182.58%
ROCE(3y)11.7%
ROCE(5y)12.97%
ROICexcg growth 3Y-2.41%
ROICexcg growth 5YN/A
ROICexc growth 3Y8.25%
ROICexc growth 5Y-17.26%
OM growth 3Y2.65%
OM growth 5Y-7.92%
PM growth 3Y-45.05%
PM growth 5Y3.26%
GM growth 3Y-0.79%
GM growth 5Y-0.97%
F-Score6
Asset Turnover0.42
Health
Industry RankSector Rank
Debt/Equity 3.73
Debt/FCF 2.25
Debt/EBITDA 2.95
Cap/Depr 32.82%
Cap/Sales 3.16%
Interest Coverage 6.23
Cash Conversion 158.38%
Profit Quality 326.93%
Current Ratio 0.87
Quick Ratio 0.87
Altman-Z 1.85
F-Score6
WACC10.18%
ROIC/WACC0.77
Cap/Depr(3y)34.45%
Cap/Depr(5y)34.05%
Cap/Sales(3y)3.06%
Cap/Sales(5y)2.88%
Profit Quality(3y)236.48%
Profit Quality(5y)194.34%
High Growth Momentum
Growth
EPS 1Y (TTM)3.9%
EPS 3Y0.31%
EPS 5Y4.63%
EPS Q2Q%11.59%
EPS Next Y9.9%
EPS Next 2Y12.07%
EPS Next 3Y8.72%
EPS Next 5Y7.04%
Revenue 1Y (TTM)3.56%
Revenue growth 3Y7.28%
Revenue growth 5Y11.17%
Sales Q2Q%2.16%
Revenue Next Year4.52%
Revenue Next 2Y5.39%
Revenue Next 3Y5.55%
Revenue Next 5Y8.4%
EBIT growth 1Y-16.59%
EBIT growth 3Y10.12%
EBIT growth 5Y2.37%
EBIT Next Year34.25%
EBIT Next 3Y19.61%
EBIT Next 5YN/A
FCF growth 1Y13.1%
FCF growth 3Y2.33%
FCF growth 5Y5.43%
OCF growth 1Y14.56%
OCF growth 3Y3.56%
OCF growth 5Y5.97%